
% Preferences
gamma = [1.5,1.5];          % CRRA
beta  = [0.95, 0.95];       % Discount Factors

% Capital Adjustment Cost
phi   = 0.1;                % Date 0: Adjustment Costs

% Uncertainty
z     = [5, 35];            % Two-state Uncertainty
pi    = [0.7, 0.3];         % Uncertainty probabilities

% Endowments
n0    = [40, 40];           % Date 0: Endowments/Dollars
n1    = [40, 40;
         40, 40];           % Date 1: Endowments/Dollars